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The rental market has changed significantly since this article was first published in 2022. One of the biggest changes is the move away from Assured Shorthold Tenancies, commonly known as ASTs, and the introduction of Assured Periodic Tenancies, or APTs.
For landlords, property investors and limited company borrowers, it is important to understand how these tenancy structures differ from corporate let agreements. They may look similar at first because both involve residential property being occupied by tenants, but from a legal, lending and risk point of view, they can be very different.
This is especially important if you are buying, refinancing or restructuring a buy-to-let, HMO, supported living or semi-commercial investment.
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What is an Assured Periodic Tenancy?
An Assured Periodic Tenancy, or APT, is now the standard tenancy structure for many private residential lets in England where the tenant is an individual using the property as their home.
Unlike the old AST model, an APT does not usually have a fixed initial term of 6 or 12 months. Instead, the tenancy rolls forward from the start, usually on a monthly or weekly basis depending on how rent is paid.
This gives tenants more flexibility, but it also means landlords need to think differently about rental planning, lender expectations and long-term management.
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Key features of an Assured Periodic Tenancy
An APT has several important features landlords need to understand.
Tenant notice
Rent increases are more controlled under the new system. Landlords generally need to follow the correct statutory process, and rent increases are limited in frequency.
Older rent review clauses may no longer work in the same way, so landlords should make sure their tenancy documents are up to date.
Pets
Tenants have stronger rights to request permission to keep a pet. Landlords can still refuse where there is a valid reason, but they need to deal with requests properly and reasonably.
This is another reason why tenancy agreements, insurance and property management processes should be reviewed.
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What is a corporate let agreement?
A corporate let is different because the tenant is not an individual. Instead, the tenant is usually a limited company, council, housing association, charity or other organisation.
The organisation rents the property from the landlord and may then use it to house employees, service users, temporary residents or people requiring supported accommodation.
Because the tenant is an organisation rather than an individual, corporate lets often fall outside the standard APT framework and are commonly treated as common law tenancies.
This distinction is very important when applying for finance.
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Who might use a corporate let?
Corporate lets can be used in a range of situations, including:
- Staff accommodation
- Temporary housing placements
- Council or local authority housing arrangements
- Supported living providers
- Housing associations
- Charities or community organisations
- Asylum support providers
- Care or social housing providers
The structure can vary significantly depending on who the corporate tenant is, what the property is being used for and how the lease is written.
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Why do corporate lets appeal to landlords?
Corporate lets can be attractive to landlords because they may offer greater certainty than a standard private rental arrangement.
Potential benefits include:
- Guaranteed or more predictable rental income
- Longer fixed terms, often between 2 and 5 years
- Reduced void periods
- Less day-to-day tenant management
- A consistent pipeline of occupants
- Potential repair obligations placed on the corporate tenant
- Full Repairing and Insuring lease structures in some cases
For landlords who want a more hands-off investment, this can look appealing. However, it is not always straightforward from a lending point of view.
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Why lenders look closely at corporate let agreements
Lender appetite for corporate lets varies considerably.
Some lenders are comfortable with them, especially where the corporate tenant is financially strong, the lease is well drafted and the use of the property is clear.
Other lenders may be cautious or decline them altogether, particularly where the agreement includes unusual terms, underletting permissions, supported living arrangements or obligations that are not standard for buy-to-let lending.
This is why the lease needs to be reviewed carefully before a mortgage application is submitted.
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What lenders may want to review
When assessing a corporate let, lenders may consider:
- Who the corporate tenant is
- How strong the organisation is financially
- The length of the lease
- Break clauses
- Rent payment terms
- Repairing obligations
- Whether the agreement is Full Repairing and Insuring
- Whether the property will be sublet or occupied by third parties
- Whether the use is standard residential, supported living or temporary accommodation
- Whether the property needs an HMO licence
- Whether planning permission or local authority consent is required
- Whether the lease creates any unusual risks for the lender
This is where many applications run into problems. A landlord may have a strong rental agreement in place, but if the lender is not comfortable with the wording, the tenant type or the property use, finance can become more difficult.
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APT vs corporate let, what is the main difference?
The main difference is who the tenant is.
With an APT, the tenant is usually an individual living in the property as their home.
With a corporate let, the tenant is an organisation. The people living in the property may not be the landlord’s direct tenants.
That difference affects the legal structure, the tenancy agreement, the landlord’s responsibilities and the lenders that may be willing to consider the property.
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Which option is better for landlords?
There is no single answer.
An APT may suit landlords who want a more conventional buy-to-let structure with individual tenants and a wider pool of potential lenders.
A corporate let may suit landlords who want longer-term income, reduced voids and a more hands-off arrangement, but only if the agreement is properly structured and the lender is comfortable with it.
The important point is not simply which option pays the highest rent. Landlords also need to consider risk, flexibility, finance options, legal obligations and exit strategy.
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Why advice is important before signing a corporate let
Landlords should be careful about signing a corporate let agreement before checking whether it will be acceptable to their lender.
A lease that looks attractive commercially may create problems if it restricts refinancing options or falls outside lender criteria.
This is particularly important for landlords using limited company buy-to-let mortgages, HMO finance, supported living finance or semi-commercial lending.
Before signing an agreement, it is sensible to review:
- The lease terms
- The tenant organisation
- The proposed use of the property
- The lender’s view on corporate lets
- Planning and licensing requirements
- Insurance requirements
- Repairing obligations
- The long-term exit strategy
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FAQs
Is an AST still used in England?
Assured Shorthold Tenancies have been replaced by Assured Periodic Tenancies under the newer rental rules. Older terminology may still appear in existing documents, but landlords should make sure their tenancy agreements are up to date.
What is an APT?
An APT, or Assured Periodic Tenancy, is a rolling tenancy without a traditional fixed term. It usually continues on a monthly or weekly basis depending on how rent is paid.
Is a corporate let the same as an APT?
No. A corporate let is different because the tenant is an organisation, such as a limited company, council, charity or housing association. An APT usually involves an individual tenant living in the property as their home.
Do lenders accept corporate lets?
Some lenders do, but criteria vary. The lender will usually want to review the lease, the tenant organisation, the property use and any non-standard terms before agreeing to lend.
Can I get a buy-to-let mortgage with a corporate let?
It may be possible, but not every buy-to-let lender accepts corporate lets. Specialist advice is important before applying or signing the lease.
Are corporate lets good for landlords?
They can be, especially where they provide longer-term rental income and lower void risk. However, they can also be more complex and may reduce the number of lenders available.
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Can Advocate Finance help?
Advocate Finance helps landlords and property investors understand their finance options across standard buy-to-let, HMO, supported living, semi-commercial and specialist landlord lending.
If you are considering a corporate let, refinancing a property already let to an organisation, or moving from a standard residential tenancy model to a longer-term lease, it is important to understand which lenders may be comfortable with the arrangement.
The right lender will depend on the lease, the property, the tenant organisation and the overall strength of the application.
Contact Advocate Finance to discuss your options before committing to a corporate let agreement or refinancing a property with a non-standard tenancy structure.
